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Raleigh, N.C. — About 86 percent of all prescriptions filled in the U.S. are for generic medications. Those who have insurance typically pay a small co-pay, but WRAL Investigates found customers can get dozens of commonly prescribed generic drugs for less than what insurance charges.

“If you use your insurance to buy a generic medication in the United States, chances are you are paying too much for it,” said Dr. David Belk, an internist who runs his own practice in Alameda, Calif.

Belk also blogs about health care costs as he looks at ways his patients can save money. He says Americans have been led to believe that all medications are expensive and that insurance saves customers money all the time. As patents expire, Belk says, more companies start making the generic and prices go way down – sometimes to just pennies per pill.

About 20 percent of Americans use at least five prescription medications, and the costs can add up.

Pam Grimes of Johnston County, who has beaten Stage 3 breast cancer, says she takes six prescription drugs – two are name brand and four are generics. With insurance, including her $10 monthly co-pay at the local pharmacy, Grimes spends $40 a month on generic medication alone.

“I know there’s probably something out there cheaper,” Grimes said.

She is right. Walmart, Target and Kroger have more than 200 generic drugs for just $4 a month, or $10 for three months. No insurance is needed. Those who have insurance are charged a lower price.

Target pharmacist Thomas Sinodis says people are often surprised to learn that their medications can cost more with insurance.

"Sometimes they’re like, 'But my co-pay is $10,' and we’ll have to explain, 'Actually, this is on our $4 list, so it’s only going to be $4 this month,'" Sinodis said.

Belk says it's "only the chain pharmacies that sell it to you for your insurance co-pay that are most of the time ripping you off."

WRAL Investigates researched how much pharmacies actually pay for pills. The federal government does a weekly survey of hundreds of pharmacies across the country to find out what they pay for nearly every prescribed medication. Six out of the 10 most commonly prescribed medications in the U.S. cost pharmacies 7 cents a pill or less, no more than $2.10 for a month's supply.

So, if many generic medications are that cheap, why do insurance plans still have $10 co-pays? WRAL Investigates reached out to Blue Cross Blue Shield, which said customers can get a plan that has $5 co-pays or no co-pays on prescriptions. But customers might have a higher premium. Many group insurance plans, on average, have $10 co-pays for generics and $20 to $40 co-pays for name-brands.

WRAL Investigates looked at the medications Grimes is taking to see how much they cost. Insurance does save her money on some of the drugs. But hydrochlorothiazide, a blood pressure medication, is just 3 cents a pill, or 90 cents for 30 days. Her insurance co-pay is $10. Another blood pressure medication, metoprolol tartrate, is just 2.3 cents a pill, or 60 cents for 30 days. Again, she pays $10.

Belk calls it the pharmacies' dirty little secret.

“They don’t want you to know that because the insurance co-pay is actually the biggest profit most chain pharmacies get,” he said.

Daniel Barbara, executive director of the North Carolina Association of Pharmacists, disagrees. He says the co-pay “off-sets the cost to the insurance company, not the pharmacy. Often times, the co-pay is substantially more than the profit made by the pharmacy."

"As with most issues in business and health care, the issue of co-pays and medication costs is not nearly as a simple as it would appear from a cursory review of the subject," Barbara said in a statement. "Costs are further affected by factors such as availability/scarcity of the resource, competition, transportation and demand." (Read Barbara's full statement.)

Belk maintains, for the majority of commonly prescribed generics, a customer’s co-pay more than covers the cost of the medication.

“No one is talking about it yet. If no one’s talking about it, no one knows, and they get away with it,” he said.

WRAL Investigates found that Costco also offers incredible savings, and customers don't need a membership to buy at the pharmacy. At Costco, two of Grimes' blood pressure medications are just $16 and $18 for an entire year's supply.

Between Target, Walmart, Kroger and Costco, if Grimes shopped around, she could save $286 a year. Belk says those retailers are not taking a loss on the generic drugs.

“They’re still selling it as a profit,” he said. “And since it’s less than what the chain pharmacies and what you insurance gives it to you for, it looks like they’re undercutting everyone. In reality, they’re just selling it for what it’s worth.”

Joel Farley is a licensed pharmacist and associate professor who studies drug pricing and policy at the University of North Carolina at Chapel Hill. He says there’s much more to drug pricing than the pills.

“For a lot of companies, $4 generics are a way to bring people in the store and buy other things while in the store,” Farley said. “They’re able to offer that because the ingredient costs of medication are less than $4, but I don’t think they’re adequately building in cost of dispensing medication (and the) cost of clinical consultation the pharmacist has, for example.”

Farley points out the important role pharmacists have in making sure patients are getting the right drugs and checking for drug interactions and side effects.

A corporate pharmacy director at Blue Cross Blue Shield says it's important to show your insurance card. The drug interactions can’t be tracked without using one’s insurance card.

For Grimes, shopping around and getting to know a new pharmacist is well worth the savings.

Of course, insurance does save customers money on many brand-name and generic drugs, but don't assume the co-pay is the best price.

Harris Teeter and Walgreen’s have generic prescription savings programs, but customers have to pay a small annual fee to join. There is no annual fee for $4 generics at Walmart, Target or Kroger, and customers don't have to have a membership to shop at the Costco pharmacy. It may be hard to search for prices at Costco's website, but customers can call their local store and ask for a price quote.

WRAL Investigates heard from a number of pharmacists about this topic. They pointed out the danger of shopping around for medication and the risk of dangerous drug interactions. Patients should have a conversation about it with their doctor and always have a list of all the medications they’re taking to discuss with their pharmacist.

According to the IMS Institute of Healthcare Informatics, a company that tracks sales at the pharmacy level for drug companies:

86 percent of prescriptions are for generics in 2013

Patent expirations for products used by millions of patients have contributed to a nearly 30 percent rise in the generic share of prescriptions over the last 10 years

Generics are now dispensed 95 percent of the time when a generic form is available

Burt WhitleyNov 7, 2014

This article is just pointing out the prices at pharmacies are different for generics and the savings. I think it's not the pharmacies that are the problem, because I can understand the pricing to survive and get them in the door pricing. In general though its more our leaders in government, health insurance companies and the drug companies that are controlling the prices. In the last 3 months my 6 prescriptions have cost me just under $600 a month. The total for 3 generics is under $20 and the other 3 are name brand, since there are no generics for them. I have a hard time believing the 3 name brand cost that much to make and get to consumers. And that they can't be made generic to be cheaper. With only SSI, SSDI, other people and I have no money for food and other expenses while we're in this "Donut Gap" coverage. The entire "Healthcare" and other Industries need to be reformed and restructured to protect and promote the well being of every Citizen and Veteran. Head to toe, w/mouth.

LilredpillNov 5, 2014

So, according to Dr. Belk's comments, he should be willing to give $4 exams, since it doesn't "cost" him anything, right? :) Did you know that prescribers get incentives from the government for using electronic prescribing, while pharmacies have to foot the bill?

LilredpillNov 5, 2014

I am a pharmacist and don't understand why pharmacies are being made to look like the bad guys here when they are just trying to get by. This so-called investigation gives the cost of the drug product but does not include what it actually costs to fill a prescription. There is so much more to it, including labor, materials, and general overhead. The pharmacies that charge $4 are losing money on every script, hoping you will shop in the store. On a typical day, I'd say as much as 10-20% of all the prescriptions I fill are being paid under cost, and that's just the cost of the actual product, not the total cost of filling the script. Some people are willing to shell out $5 for a fancy coffee drink, but will balk at paying $10 for a prescription. Why does that price seem so unreasonable? Those discount cards you find on the internet charge the pharmacy part of what you pay and reimbursement rates just keep getting cut more and more from insurance companies. Just trying to get by.

Burt WhitleyNov 4, 2014

Our Representatives for too many years have overlooked and not worked enough for what's best for our and our Country's stability to prosper and be healthier. Instead, most of us, our friends and family are now struggling and fighting to just survive, to hope and pray the coming days will get better. When you add in things beyond what you can control like; loss of income or employment, loss of a spouse, health issues and the rising cost of care, foreclosure, disasters, U.S. subprime mortgage crisis and financial crisis of 2007–08 along with the ensuing global recession in 2009 and other issues our Nation's Leaders and the CEO's within this country do things that are against and not for the people, citizens and employees just makes it harder for all. When one becomes ill they may be faced with short or long term loss of income and the cost of care, stress and emotions rising. So, why are they also faced with the burden of having to fight for equal care and medicine that is priced more?

voice your opinionNov 4, 2014

I know this is for real. I used to buy generic meds through my insurance company for $20 for 90-days. Now I get those same meds for $10 for 90-days at Walmart without using my insurance.

USA's medical system is soooooo screwed up!!!

Beth MillerNov 4, 2014

WhatsInANameNov 4, 2014

When I switched jobs and was forced into a horrible insurance plan, I found out about web sites like GoodRX. They show the actual prices without insurance. Now I don't get the majority of my prescriptions with insurance because it is almost always more expensive. My best find was for one generic that was $300/month with insurance, but is only $30/month without. Talk about ripping consumers off.

John MurphyNov 4, 2014

A co-pay is not was is required to be paid on a medication that costs less. If you have a $10 co pay amd the medicine is $4, then you only pay $4.

John MurphyNov 4, 2014

Even though I have insurance and a co-pay, I have some meds that I am only charged a few dollars for. I've never had a problem with CVS.

SMAPAEANov 4, 2014

Good story WRAL! Sad that in order not to get generics, you have to jump through soo many hoops, at least with the State Health Plan. Target has always been very good at getting me the best price between insurance and not.